Living independently and within one’s means can be tricky in our modern consumerist society. There are so many bills to pay, so many shiny new things to buy, so many cool places you see people visit on social media that you must visit too. It’s possible to do all of those things, but it’s much more important to live within your means while doing so. If you follow these ten simple and easy steps, it will almost certainly be possible for you to achieve your dreams while living in financial stability.
Create a Budget
The first, and most important step to achieving financial stability is to create a budget to track your incoming cash and outgoing expenses. If you don’t know what you’re spending and what you’re receiving, how can you possibly know if you’re living within your means?
Thankfully, creating a budget is rather simple. All you have to do is compare your expenses against your income. Once you do this you can begin to set aside portions for specific expenditures, and leave portions aside for savings, a retirement fund, an emergency fund, and other things.
Pay Back Debt
Paying back debt is an incredibly important thing to do when managing your finances properly. Sometimes you may have the urge to skip a payment because you need to buy something new for yourself, but doing this can wreak havoc on your credit and can create cascading problems for the future. Always pay back debt to keep your interest from piling up and to ensure things don’t get worse in the future.
Pay Your Bills Ahead of Time
You should always pay your bills on time to ensure you’re on top of all of your obligations. In your budget, you should always assume your bills will be paid off before any money is set aside for anything else. Doing this will keep you responsible and honest with the money you have.
Pay Bills Online
Paying bills online is excellent practice because it will help you keep on top of things faster and more efficiently. Aside from this, certain institutions will offer discounts to customers who pay online, so it’s a good idea to take advantage of offers like this when you have the chance.
Keep an Emergency Fund
Part of your budget should always be allocated towards an emergency fund whenever you have extra money. An emergency fund’s purpose is self-explanatory: it’s money you use when an unforeseen event arises. If you prepare for these events in advance you’ll never be caught by surprise and be forced to take a hefty loan with unsatisfactory interest rates.
Learn How to Say No
Learning how to say no to yourself and to other members of your family can be very difficult for some people, but it’s a skill you’ll have to learn if you want to achieve financial stability. Sometimes that little voice in your head tells you that you really need a new phone or a new car now, but if you can’t afford one without dipping into savings or your emergency fund you definitely shouldn’t buy it. You should only buy what your budget allows you to buy within your means after paying back bills and other necessities.
Along with this, it’s important you learn to say no to your children or your significant other if they ask for a big purchase you can’t afford. Making sure you and your entire family lives within its means can sometimes mean saying no when you don’t want to, but it will end up better for everyone if you do.
Save For Luxuries and other Goals
That said, it’s important to treat yourself and the people you love when you can. There’s no reason why your budget shouldn’t have a spot in it for luxuries such as big gifts for yourself. All you have to do is save up for these purchases over time instead of making big expenditures at once. You need to plan for these things to make sure everything works smoothly and you don’t go into debt for something like a trip to Hawaii.
Start a Retirement Fund
As mentioned before, part of your budget should be allocated towards your retirement. If you’re young, this isn’t something you want to be thinking about right now, but if you do, you’ll have a leg-up in the far future when you aren’t earning as much as you are now. A lot of people suffer in old age because they didn’t set aside money for themselves to live on. If you don’t have family to rely on at that point you could be in serious trouble. This is why it’s important to start saving early for your retirement.
Research, Research, Research
Everything you do should be thoroughly researched. These days it’s trivial for anyone to find out any kind of information they need to, so there’s no excuse if you aren’t informed about the things you need to do to achieve financial stability.
Don’t Eat Out As Much
While this might seem like a strange tip, eating out is actually a major expenditure for a lot of people. Eating at restaurants is usually much more expensive than cooking, though many people still eat out because of lack of time or knowledge. It’s not only rewarding and satisfying for you to cook for yourself, but it can save you a ton of money every month. Once you get better at it you won’t even miss eating out at restaurants, though if you have space in your budget, it's definitely a good idea to treat yourself to it when you feel like you need to.